As leadership began to form under Max Wetzel, who assumed the CEO post of CKE Restaurants in March 2023, migrating over after a four-year run with Papa Johns, it became clear the company had an identity crisis. Only, in this case, Hardee’s and Carl’s Jr. each had the issue of being too distinct.
Chris Bode, named president of Hardee’s USA last fall (he served as COO since September 2022 following 11 years with Denny’s), says franchisees and consumers deserved a brand split. Logistically, this meant creating a leadership structure with three teams each led by a president—Hardee’s by Bode, Mike Woida continuing atop international, and, most recently, the hire of Blake Devillier as Carl’s Jr.’s USA president. Devillier joined in early April after working as SVP of field operations for Taco Bell. Previously, he was with retail giant GAP for 25 years, including roles at Banana Republic, Gap brand, and Old Navy.
The notion guests and operators needed the change, Bode recalls, was something that became apparent from the outset. CKE conducted guest research and began the process in the summer of 2023.
“Each brand has its own unique spot within the industry,” Bode says. “You think about Carl’s Jr.—big, bold, delicious flavors—and Hardee’s is hand-breaded chicken tenders, 100 percent Angus beef burgers, made-from-scratch biscuits. They’re just two brands. Two consumer bases. Two parts of the country. And it didn’t make any sense to have these brands connected like that.”
Separating them allowed Hardee’s and Carl’s Jr. to emphasize specific traits versus trying to streamline personalities.
An example: Hardee’s brought back Cinnamon ‘N’ Raisin Biscuits (pictured below) in November for the first time in two decades. Bode says that wouldn’t have happened before since you’d need to advertise the product from a national level. There’d be a disconnect on Carl’s Jr.’s West Coast base trying to talk to a Hardee’s customer.
“This allows a much different level of focus for both brands,” he says.
Devillier adds separating Carl’s Jr. and Hardee’s forced the organization to think, if it was going to split the brands from a marketing and consumer angle, it also needed to look at how it provided resources behind each to make that happen. That’s where the three, clear leaders laid the foundation.
“They [now] have the strategic clarity and accountability to really help to extract and build as much value in each of the brands across the world,” Devillier says, noting it played a key role in attracting him to the opportunity.
But going back, the reason this proved alluring, Devillier continues, is because the more you unpacked Carl’s Jr. and Hardee’s, the more you began to see distinct layers. Carl’s Jr. isn’t searching for its DNA or trying to reinvent itself. The 1941-founded concept has been a West Coast icon going on eight decades with a Famous Star burger locals could pick by sight off a billboard.
Carl Karcher and his wife, Margaret, unloaded their savings to buy a hot dog cart. Within five years, the Karchers opened their first restaurant and the debut Carl’s Jr. restaurants opened in Anaheim in the 1950s. The 1960s ushered in expansion as the Karchers operated 24 units and became Carl Karcher Enterprises, Inc., or what you now see as CKE. The dining rooms were renovated and menus streamlined. By 1977, there were more than 200 in California and it became the first quick-service spot to offer salad bars. Out-of-state expansion landed in 1979 in Las Vegas.
According to the upcoming QSR 50 (the report runs in August), Carl’s Jr. ended 2023 with 1,066 locations (1,018 franchised) and $1.546 billion in systemwide sales. AUVs were $1.450 million and the U.S. unit count retracted by two, year-over-year.
Devillier says Karcher’s legacy remains integral. “The brand has a very long history of winning from a product standpoint,” he says. “And I think in this industry, product and marketing are huge differentiators and some of the biggest keys to being able to deliver sustainable success. I was really excited by the product offerings and, in my estimation, we offer some of the most innovative products in the marketplace.”
Breaking the brands apart enabled Carl’s Jr., simply, to exploit those realities. And from a franchisee standpoint, there’s direct leadership now serving as stewards able to amplify that message.
“Having Blake out West and myself on the East,” Bode says, “engaging with our franchisees daily, is going to be really important. Our franchise community has embraced the brand separation in a really big way because what they’re seeing now is a level of focus, like I said, they deserve.”
“So things like transformation,” he continues. “With Hardee’s over the past couple of years, we’ve been focused on exterior imaging of our restaurants to make sure that we upgraded our facilities to be more relevant with today’s consumer.”
That’s one part of the Hardee’s-specific story. The second, Bode says, is a little over a year ago the chain implemented some innovation and streamlined the menu so it could focus on execution and speed. Further, it leaned into digital with investments in mobile ordering, delivery, and loyalty. Bode says Hardee’s watched digital mix grow as it caught up.
Likewise at Carl’s Jr., the decision to go solo led to an effort to individualize the marketing position of each. CKE refocused on granular details like imagery, text word choice, and color palette. “All of those elements were necessary to signal a unique brand identity,” Devillier says. “They were executed over the last month [in April]. If you’ve been to one of our restaurants, you would have seen that we’ve completely transformed the look and feel of our menu.”
Carl’s Jr., now focused on its own setup instead of trying to spread uniform changes across two brands, realized it could provide clarity in core buckets. It removed a “small handful” of items and reoriented its menu to make its burger and flavor platforms easier to navigate. It also provided optionality around proteins and sizing. “That’s another effort that’s underway that’s really helping to differentiate the experience for the consumer,” Devillier says.
Carl’s Jr. ran a Super Bowl Ad promoting “Free Burger Day” for guests who got the app and joined the My Rewards program. “All of that, I think, was an effort to really reassert our focus and our positioning around these audacious and bold flavorful hamburgers,” he says.
The brand in May also started testing a “More Bang, Less Buck” value program that spotlighted an under $4 messaging. Devillier says most of the items exist on Carl’s Jr.’s menu. This was more a marketing test to “raise the volume on yes, we offer what we consider premium burgers,” he says, “but we also do offer lots of things that you might consider more value driven.”
The Carl’s Jr. customer, Devillier explains, gives the brand credit for innovation. It brought back the El Diablo burger last June for the first time since 2018 (habanero sauce, bacon, Jalapeno POPPERS bites, pepperjack cheese and jalapenos). It’s going to stay on the menu permanently.
“The customer definitely reacts and rewards us, I think, when we bring to market the products that really speak to them and who this brand is intrinsically,” he says.
Regarding Hardee’s, which, per the QSR 50, exited 2023 with U.S. systemwide sales of $1.981 billion, AUVs of $1.16 million, and 1,707 stores (1,512 franchises), down 45 year-over-year, Bode says leadership zeroed in on operations and the brand’s hallmarks. It tested a new charbroiler to provide step savings in the back of the house; vertical toasters; and continues to look at automation that could make it easier for teams to run restaurants. But it comes back to what makes Hardee’s Hardee’s.
“It’s such a legacy brand with such potential,” Bode says (Hardee’s was founded in 1960 in Greenville, North Carolina, by Wilber Hardee and acquired by CKE in 1997). “If you think about our breakfast menu, industry best, bar none. My past 20 months I’ve been eating my way through our menu and everybody else’s menu, and I think we have real high-quality products.”
“For us,” he adds, “it’s about leaning into what we’re really good at. Hand-breaded chicken tenders, Angus beef burgers, leveraging the digital world, reintroducing products, legacy products, like Cinnamon ‘N’ Raisin Biscuits, are really paying off well.”
Devillier says having those recognizable and redeemable qualities are worth every bit of their currency in today’s traffic-strapped dynamic. Customers are searching for deals and dining out less often. A recent LendingTree survey suggested 78 percent of customers view fast food as a “luxury” since it’s become so expensive. “As we read press releases, we shop our competitors constantly, it’s clear that those that are winning, have a strong digital presence, have strong loyalty programs, the value menu price has been a differentiator. Chicken has certainly been a driver of customer visits as well. It’s the biggest protein consumed in the United States. So I think we look at all of those things and feel good about the things that we have strategically in place to really bring each of those strategies to life in a big and bold way.”
Bode adds quality service and cleanliness are table-stakes. Image is also key to that (why the brand continues to work on exterior remodels). “There’s a lot of companies out there right now that are going to be leaning back into value,” he says. “We’ve been leaning into value over the past 12 months. That’s part of the success that we’re recognizing. So I think 2 for $5 hand-breaded chicken tender wraps—it was a nice success for our brand because it resonates with our consumers.”
Not just value, in other terms, but value embedded into the brand’s differentiators. This separation is designed to give Carl’s Jr. and Hardee’s freedom to explore and accentuate everywhere it knows how to win.
This includes development. Bode says Hardee’s is growing but will slow pace a bit over the next 18 months or so as it shores up asset evolution. “We think the upside for our brands is significant across the country,” he says.
Yet there’s clear visions of where each concept goes, whether it’s a Doral, Florida, Carl’s Jr. that works better than a Hardee’s would. Or Carl’s Jr.’s recent announcement it would enter the U.K. and Republic of Ireland through a deal with Boparan Restaurant Group (there are nearly 100 stores across Sapin, France, Denmark, Turkey, and Switzerland). Most of the expansion for Carl’s Jr., near-term, will likely take place outside of the U.S.
“I think there’s a lot of other work that’s going into the brands right now that will prepare us for even more growth in the coming years,” Devillier says.
